The rise in social media has generated a vast marketplace for businesses seeking to advertise their products to target audiences. Platforms such as Facebook, Instagram and Twitter are now a day to day part of people’s lives and represent a commercial opportunity for those seeking alternative methods to reach consumers. Social media personalities with large followings are known as “influencers”. These individuals can help shape the opinions of their followers within certain topic areas and are used by brands to endorse a product.

In the context of social media marketing, it’s unclear how the relevant legislation applies to posts made by these influencers. A key aim of this type of advertising is that businesses who engage influencers want the appearance of a natural endorsement of their product in order to seem more genuine. This can blur the lines between expressing an opinion and paid advertisement.

Section 18 of the Australian Consumer Law prohibits misleading or deceptive conduct in online advertising, which raises issues when influencers endorse products without disclosing if they are receiving payment from the business. Further, Section 29 of the ACL prohibits the making of a false or misleading representation concerning a testimonial made by any person.

It’s important that influencers and other celebrities are aware of these obligations when promoting a good or service.

The Australian Competition and Consumer Commission (ACCC) have published guidelines for businesses using online review platforms which provide some clarity on the topic. The guidelines state:

Engaging an individual to deliver a review by a person purporting to be, but is not in fact, a genuine consumer is misleading

Reviews may mislead consumers where they are presented as impartial but that person has been provided with a financial or non-financial benefit.

In addition, the Australian Association of National Advertisers now requires advertising to be ‘clearly distinguishable’ to the relevant audience.

In response to these requirements, many influencers have started including certain hashtags in their posts such as #sponsored or #ad. It’s unclear whether such hashtags will satisfy the “clearly distinguishable” test in the context of each post, but there are a number of steps influencers and brand owners can take to ensure they are compliant.

These include:

If content has been paid for, it’s clearly disclosed to their audience

Any commercial relationships that are relevant are disclosed

Ensuring endorsements accurately represent the influencer’s opinion.

It’s important for both brand owners and influences to be aware of and comply with their disclosure obligations or they may be at risk of regulatory action.

We are fortunate to have an extensive client base of such influencers which is reflective of the firm’s rich history in acting for major players in the media and entertainment space.

We can assist you with any queries you may have about advertisement or your social media use. Please do not hesitate to contact us on (03) 9670 5000.

This article was written by Commercial Senior Associate, Josh Kaplan and Clerk, Olly Gagiero.

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